Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect, as well as a distinguished senior fellow of the think tank Demos. He was a longtime columnist for Business Week and continues to write columns in The Boston Globe. He is the author of Obama's Challenge and other books.

Recent Articles

Double Standard on Bankruptcy

W ith all the corporate and accounting scandals, you may have noticed that Congress is also working on bankruptcy reform legislation. A bill nearly passed last week and will probably be approved when Congress returns in September. However, this is precisely the wrong kind of reform. It is a measure long sought by the banking industry to make it easier to squeeze money from ordinary individuals who declare bankruptcy after facing personal hard times or being overwhelmed by debt. Often these are individuals facing catastrophic illnesses or personal financial reverses. Sometimes they are people who ran up too much consumer debt, but in these buying binges the credit card companies are willing coconspirators. They foist credit cards on college kids with no visible means of support save parents. They encourage people to run up debts with multiple cards. Why? In a low-interest-rate environment, lenders love those 20 percent, Mafia-style interest rates that many consumers foolishly pay, and...

Wanted: Brave Democrats

V ermont Gov. Howard Dean, recently profiled in these pages, committed a brave political act the other day. He called for repeal of George W. Bush's $1.35 trillion tax cut. What makes the act so brave is not that repealing the tax cut is an outlandish idea, or even that it is unpopular. What makes Dean's call courageous is that very few other leading Democrats have taken this stand. Dean made the proposal as a way to pay for national health insurance, but there are lots of other good rationales for the repeal. Let's put this in some perspective. Bush's tax cut was enacted before the stock-market bust, before the recession, before September 11, when it appeared that the government faced a fiscal future of indefinite surpluses. Now there is a real risk of a double-dip recession. Deficits loom for decades. And every domestic program that Democrats favor is held by the White House to be unaffordable -- as if the tax cut had nothing to do with the huge hole in the budget. Meanwhile, the...

The Moral Equivalent of War Production

R estoration of robust growth is the paramount challenge facing the nation, the most significant issue of the 1992 election, and the first task that will face a new administration. Indeed, all other important public questions are being held hostage to a sick economy that depresses aspiration, increases unemployment, de pletes revenue, and makes public remediation seem unaffordable. Many serious commentators have lately concluded that nothing can be done to cure the depressed economy, save to depress it further via budget balance and wait for private confidence to return. The discussion bears an uncanny similarity to that of the late 1930s, when the economics journals were filled with gloomy assessments of something called "mature capitalism." After a full decade of depression, many economists concluded that 12 percent unemployment, static living standards, and 1 or 2 percent annual growth were the best a mature market economy could do. An abrupt event on nobody's economic radar screen...

Mr. Corporate Reform?

I s George Bush about to get lucky again? White House political adviser Karl Rove has positioned Bush as the champion of corporate reform, even though Bush's own history epitomized the kind of corruption that Enron and Global Crossing raised to new heights. Last week Congressional Republicans, long obstructionist on this issue, quickly reversed course, too. By the endgame the House Republican leadership -- after proposing much weaker legislation -- has embraced the reform bill proposed by Democratic Senator Paul Sarbanes of Maryland and then some. And the financial markets helped with the biggest one-week rally since 1933. So President Bush -- Mr. Education, Mr. Drug Benefit -- is now Mr. Corporate Reform. Is the latter any more believable than the former? This will depend on two factors -- the economy and the Democrats. At this writing, despite the market comeback, a lot of real damage has been done to the real economy by the same abuses that caused the market slide. And it is...

Who Gets Hurt When Stocks Fall?

H ere is a paradox to ponder. If the stock market crash stops short of an economic depression, we can partly thank government spending -- but we can also thank America's extreme concentration of private wealth. It's true, as widely reported, that about half of all Americans are now shareholders. But stock ownership is very narrowly held. The majority of shares are held by the richest 10 percent of the people. Half of us own no stock, and the typical (median) American who does own shares has less than $25,000 worth of stock. So for the vast majority of working-age Americans, stocks are simply not a factor in household budgets. Most of us live on paychecks, not dividends and capital gains. Moreover, ordinary people who do hold stocks have their holdings mostly tied up in IRAs, Keogh plans, 401(k)s, and other forms of retirement savings that can't be spent now without severe tax penalties. So a paper loss in these assets doesn't affect current consumption. All of this helps explain why...

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